South Dakota Government Blog by Bob Mercer

Monthly Archives: October 2012

The folks behind the advertising campaign for the additional 1 percent of state sales tax — known as Initiated Measure 15 on South Dakota’s election ballots this fall — appear to have switched off the erroneous message that video lottery was supposed to be for education and that politicians raided it. The replacement ad might be the winning argument, however. Here’s why…

Now the pro-IM15ers are telling property owners that a sales-tax increase protects them from higher property taxes. That is half-true and isn’t untrue.

Half of the revenue from the sales-tax increase would be distributed on a per-pupil basis to K-12 school districts. The largest source of local revenue for schools is the general education tax levy on property. Currently, school districts can opt out, meaning they can levy more for general education than the maximums set by the Legislature IF a majority of local voters don’t object in a referendum. The additional aid from the sales-tax increase probably would make new opt-outs less likely. It’s also possible that bond issues might be smaller or unnecessary for some projects, because the extra aid could be used for those purposes rather than levying a special tax on property.

The not-untrue part is that property taxes don’t have much relationship with Medicaid funding. In other words, the Medicaid half of the proposed tax increase is a non-issue for property owners. Medicaid would receive the other half of the revenue from the additional sales tax. Raising the sales tax doesn’t provide any direct financial protection for property owners in that respect.

One of the great rabbit chases in South Dakota politics is tracking how Democrats shuffle money from committee to committee. The pre-general report from Rep. Paul Dennert, D-Aberdeen, shows a lump contribution from his Senate campaign committee to the South Dakota Democratic Party in the amount of $10,309.70. That’s more than the $8,101.70 he reported spending on his campaign for a Senate seat. He reported remaining cash of $1,108.54.

Dennert moved from the Columbia area to Aberdeen so that he would be in a new district and be able to challenge Republican Sen. Al Novstrup of Aberdeen. Novstrup’s report showed spending of — yes, this number is right — $25,890.40 with remaining cash of $365.60. Novstrup received giant contributions of $6,000 apiece from the Peter Norbeck PAC that former Gov. Mike Rounds established and from the Senate Republicans’ campaign committee, along with $1,000 from Republican Gov. Dennis Daugaard and $2,500 from Republican Sen. Corey Brown of Gettysburg.

Looks like the Dennert donation to the Democratic Party was a reallocation of resources — and maybe a white flag. Dennert, 75, has served 20 consecutive years in the Legislature: House 1993-96; Senate 1997-2004; House 2005-2012. He was term-limited in the House after this year and Republicans, when they realigned districts after the 2010 census, laid out the map so that Senate Democratic leader Jason Frerichs of Wilmot and Dennert would have been in the same district if Dennert had stayed at Columbia. He decided he’d rather switch addresses and fight, than quit.

Democratic Rep. Steve Street of Revillo is challenging for his district’s Senate seat and the incumbent, Republican Sen. Tim Begalka of Clear Lake, isn’t taking anything for granted. Begalka already won a Republican primary against Rep. Val Rausch of Big Stone City despite being outspent more than three to one, and now Begalka faces another strong opponent in Street. Street appears to have done a solid job of fundraising. His pre-general report shows that he had spent $12,129.47 on his campaign (and gave $500 to other candidates) and had $3,756.63 cash remaining. Begalka reported spending $11,066.45, owed $3,000 on advertising and had $8,649.27 cash left.

One tickler in this contest is that Street, rather than Begalka, received a $150 donation from Republican Rep. Chuck Turbiville of Deadwood, who’s term-limited and didn’t run for the Senate. Meanwhile Republican Gov. Dennis Daugaard gave $250 to Begalka.

A number to watch in legislative campaigns is the amount of money raised by a candidate in unitemized contributions. Those are the small donations that can tell a lot about a candidate’s grassroots support, or lack thereof. According to his pre-election finance report, only $225 of unitemized contributions were received by Sen. Kent Juhnke, R-Vivian. Overall he reported spending $12,214.57 and had $2,260.43 cash remaining. (Those are the numbers on his report; elsewhere his report indicates he transferred nearly $8,300 from his old House campaign committee, which would inflate his cash to more than $10,000. We’ll see if some better accounting is posted soon. There was a time when the state elections office actually checked to see whether columns added up…) The Democratic candidate challenging Juhnke is Rep. Larry Lucas of Mission. The state elections office doesn’t show a pre-general election report filed yet by Lucas as of this morning.

The National Education Association, between fighting against Referred Law 16 over its teacher contract-weakening changes, and fighting for the state sales-tax increase in Initiated Measure 15, has injected $723,000 into the two ballot-measure campaigns so far, according to campaign finance reports filed in recent days. See the posts below for further details.

The legislation known as HB 1234 that would make a half-dozen or more major changes in South Dakota’s laws regarding public schools has some politically active citizens reaching deep into their checkbooks to defend it. The legislation is the subject of Referred Law 16 on the general election ballot. The South Dakota Education Association is battling to defeat it. The measure came from the governor and had pieces added to it by Republicans in the Legislature. In the end, only Republican legislators voted for it, and many Republicans joined all of the Democrats in opposing its passage during the 2012 session. Republican Gov. Dennis Daugaard can’t use public funds to defend the law in a campaign, so there is a surrogate group that formed. It’s called Committee For South Dakota Students, and it’s spent $111,546 so far, according to the pre-general election filing report, with $1,954 cash remaining on hand.

Bill Byrne of Sioux Falls formed the committee and gave $15,000. Harvey Jewett of Aberdeen donated $10,000. A national organization called Students First made the single largest contribution of $50,000. The South Dakota Chamber of Commerce ballot question committee put in $4,000. The committee received four-figure contributions from John Calvin of Watertown $1,000; Dana Dykehouse of Sioux Falls $5,000; Mark Graham of Sioux Falls $2,500; Thomas Huegel of Sioux Falls $5,000; Garry Jacobson of Sioux Falls $5,000; Dan Kirby of Sioux Falls $5,000; Joe Kirby of Sioux Falls $5,000; and Ron Moguist of Sioux Falls $5,000. There also were some smaller contributors.

As for the No On 16 committee, its money is coming from two sources: $15,000 from the South Dakota Education Association, the labor organization for teachers and other educators; and $523,000 from the National Education Association, the national organization that is the umbrella for the state-level labor organizations. The No On 16 committee reported spending $437,352.93 so far and had $100,742.07 cash remaining on hand.

Here’s the source for a big chunk of the money paying for the advertising blitz in favor of Initiated Measure 15, which would increase South Dakota’s sales tax on most items to 5 percent, from the current 4 percent, with the proceeds to be split between K-12 school districts and Medicaid funding. The campaign money is coming largely from the Big Three of healthcare in South Dakota — Avera, Sanford and Rapid City Regional — along with a handful of smaller centers. According to pre-election campaign finance filings, together they’ve donated more than $888,000 to a committee called Healthy Communities that in turn donated the money to Moving South Dakota Forward, the main committee promoting the tax increase. In rough numbers, each of the Big Three contributed in the neighborhood of $300,000 apiece.

Moving South Dakota Forward also received $200,000 from the National Education Association, according to its report, as well as what appearst to be a total of $10,000 in donations from the South Dakota Association of Healthcare Organizations. Moving South Dakota Forward, which was formed by the South Dakota Education Association and SDAHO, reported spending $970,462.79 so far and had $145,977.88 cash on hand at the reporting deadline.

Then there is the token opposition. The No on 15 committee, which wasn’t officially organized until early October, reported spending $15,885.09 and had $25,374.91 cash on hand. The biggest contributors to the No on 15 effort were Harvey Jewett of Aberdeen, who gave $10,000, and Dusty Johnson’s old PUC campaign committee, which donated $3,000.

Looking through the pre-general election filings on campaign finances, missing from the list of ballot-question committees is an organized effort to oppose Referred Law 14, the governor’s proposed grants program for business projects costing more than $5 million. This is the measure that South Dakota Democratic Party state chairman Ben Nesselhuf led the petition drive against and succeeded in forcing the statewide vote. The Yes On 14 committee had spent $79,336.49 and had $7,138.51 remaining cash at the time of its report.

Sioux Falls Argus Leader reporter Steve Young filed an excellent piece for the newspaper about Mike Larsen, the now-retired detective for the Sioux Falls police department who, back in 1990, followed a sketchy lead and his intuition to look at Donald Moeller as the killer of Becky O’Connell in 1990.

Nothing like a little bomb less than two weeks before a big election. The liberal-oriented organization, The Center for Media and Democracy, last night rolled out its latest report on the American Legislative Exchange Council’s activities. We’ve previously written about ALEC’s methods — putting business people and legislators on the same policy committees at its national meetings, and subsidizing legislators’ trips to those meetings — and there aren’t really any surprises in the South Dakota section of the report. The timing of the report’s release fits into a general campaign of Democrats making accusations of corruption at the national and state levels. Named in the South Dakota pages of the report as receiving money from ALEC during the 2006-2008 period are current or former South Dakota legislators Quinten Burg $32.03; Al Novstrup $603.60; Mark De Vries $958.92; Manford Steele $1,753.52; Ryan Maher $1,005.92; Hal Wick $1,052.00; Deb Peters $935.28; Russell Olson $941.82; Betty Olson $974.92; Kristi Noem $1,062.29; Roger Solum $2,104.02; Dan Lederman $880.52; and Todd Schlekeway $1,004.12. The report says data weren’t available before 2006 or after 2008.

For years the South Dakota Legislature’s Executive Board struggled with the question of whether state funding should have been used for paying for legislators’ trips to ALEC meetings. The board was paying for those trips as well as to other legislative gatherings held by the National Conference of State Legislatures and the Council of State Governments. NCSL and CSG have also taken corporate donations, as has the National Governors Association. Those three organizations however don’t put donors and business representatives on their committees and in their leadership structures, which ALEC does. Earlier this year, in reforming its travel policies for South Dakota lawmakers, the Executive Board quietly omitted trips to ALEC meetings from the new list of approved organizations. Unless the Executive Board changes that position in the years ahead, the ALEC issue will shift in South Dakota to the remaining question of whether legislators need to publicly report trip payments from ALEC. Most of the South Dakota legislators who have taken reimbursement for trips to ALEC meetings, whether from ALEC directly or from the Legislature through its legislator-education travel policy, have been Republicans. ALEC is open to legislators regardless of party registration.